Cyrus Mehta

The Beneficial Impact of the Supreme Court’s Decision in Kisor v. Wilkie on H-1B Denials

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By Cyrus D. Mehta and Sonal Sharma*

In June 2019, when the Supreme Court handed down a decision in Kisor v Wilkie, it was yet to be seen what impact this decision would have on federal court challenges to H-1B denials. Prior to Kisor, federal courts adopted a deferential standard of the government’s interpretation of its own regulations. This deferential standard was governed by an earlier Supreme Court decision, Auer v. Robbins, which held that courts would give deference to an agency’s interpretation of its own ambiguous regulation. The Auer standard was similar to the standard set forth in Chevron USA v. Natural Resources Defense Council regarding how a federal court would give deference to an agency’s interpretation of a statute. Under Chevron deference, if a statute is ambiguous, a court will give deference to the agency’s interpretation, even if it does not agree with the outcome, so long as it is based on a permissible construction of the statute.

The Supreme Court in Kisor provided no new radical test of how it would view an agency’s interpretation of its own regulation. It essentially “cabined the scope” of Auer deference, and set forth a three-step approach under Kisor. Under this test,  the court must determine (i) that the regulation is “genuinely ambiguous” — the court should reach this conclusion after exhausting all the “traditional tools” of construction; (ii) if the regulation is genuinely ambiguous, whether the agency’s interpretation is reasonable; and (iii) even if it is a reasonable interpretation, whether it meets the “minimum threshold” to grant Auer deference, requiring the court to conduct an “independent inquiry” into whether (a) it is an authoritative or official position of the agency; (b) it reflects the agency’s substantive expertise; and (c) the agency’s interpretation of the rule reflects “its fair and considered judgment.”

In our prior blog in December 2019, there were few decided cases involving challenges over H-1B visa denials that had applied the Kisor standard. We analyzed how the courts ought to apply the new Auer deference standard set forth in Kisor. Most H-1B visa adjudications are guided by regulations and policies rather than by the statute, and prior to Kisor courts have mostly been paying deference to the USCIS’s interpretation of its regulations.   Since December 2019,  courts have applied the  Kisor standard in challenges to denials of H-1B petitions, and have overturned denials as well as burdensome  H-1B policy. This is indeed a welcome change!

H-1B denials resulted from the implementation of recent policy memos shifting the USCIS’s position that was not aligned with its prior statements, memos, and opinions. One example of such a shift is the memo issued in February 2018 relating to contracts and itineraries with third-party clients.  This new policy has enabled USCIS to play havoc to H-1B petitions filed by employers who place H-1B workers at third party client sites. If the third party client is unable to or refuses to provide documentation explaining the length of the assignment, and even if the employer provides evidence of its ability to employ the H-1B worker for the duration of the validity period, the USCIS has either denied the petition or shortened the validity period.  The USCIS issued this memo to be read as supplementary guidance to the employer-employee memo of 2010. Even this 2010 memo has been used to trouble employers of H-1B workers. While 8 CFR 214.2(h)(4)(ii) defines an employer-employee relationship as including “hire, pay, fire, supervise, or otherwise control the work of any such employee”, the USCIS has  focused only on the employer’s ability to control the H-1B worker and disregarded the other indicia of the employer-employee relationship.

In this blog, we analyze recent court decisions that have applied the Kisor standard or been influenced by it, and not paid deference to the USCIS’s interpretation of its regulations or of policy memos stemming from these regulations.

ITServe Aliance v. Cissna

In ITServe Alliance v. Cissna, the U.S. District Court of the District of Columbia on March 10, 2020 invalidated the USCIS policy defining an employer-employee relationship for employers of H-1B workers  as well as the 2018 policy and 1991 regulation requiring that IT firms provide a detailed itinerary and contracts for potential H-1B workers for the entire three years of their visa stay. Judge Collyer held that the current USCIS interpretation of the employer-employee relationship requirement is inconsistent with its regulation, was announced and applied without rulemaking, and cannot be enforced. Moreover, the USCIS requirements that employers (i) provide proof of non-speculative work assignments (ii) for the duration of the visa period is not supported by the statute or regulation and is arbitrary and capricious as applied to Plaintiffs’ visa petitions. These requirements were also announced and applied without rulemaking and cannot be enforced. Finally, the court held USCIS’s itinerary requirement was superseded by a later statute that permits employers to place H-1B visa holders in non-productive status and is, therefore, no longer enforceable.

Although the court did not cite Kisor, it did not pay deference to USCIS’s interpretation of its regulations even under the traditional Auer standard. Judge Collyer conducted an independent inquiry to determine if the USCIS 2018 memo is a legislative rule or a mere interpretive rule. We provide a detailed analysis of the ITServe Alliance decision.

While noting USCIS’s effort to mask the memo as mere guidance to its adjudicators, Judge Collyer concluded that the 2018 memo is indeed a legislative rule with an attempt to impose legally binding obligations on regulated parties. The court also noted that the 2018 memo in essence (i) adopted a new definition of an employer; (ii) added substantive requirements to prove the employer-employee relationship; (iii) added additional requirements to describe the work with evidence that it will be available for the duration of the visa; and (iv) burdens petitioners to provide detailed itineraries on the risk of denial on failure to comply with the new requirements.

The 2010 employer-employee memo is based on the definition of an employer pursuant to  8 C.F.R. §214.2(h)(4)(ii), but the memo still indicates that the regulation does not provide enough guidance on the definition of the employer-employee relationship. The employer-employee memo invoked the common-law as touch stone of employer’s control. Judge Collyer hollered at the USCIS from deviating from 8 C.F.R. §214.2(h)(4)(ii) specifically noting that it adopted the definition of employer under this rule which was identical to the one crafted by the Department of Labor in 1991, and to this date no amendments have been made to that definition by the USCIS. The court noted that USCIS’s sole focus on “control” over everything else, if evaluated under Auer deference, is in clear conflict with the regulations itself and hence warrants no deference. The court pointed out that the USCIS has been claiming that the term “employer-employee relationship” is not defined in the regulations, but noted that 8 C.F.R. 214.2(h)(4)(ii) clearly defines the term as:

(2) Has an employer-employee relationship with respect to employees under this part, as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee

Given this, Judge Collyer noted that the USCIS’s reliance on the common-law doctrine of “control” is contradictory to the clear definition provided under the regulations. It also noted that “[t]he common law may be a useful touchstone but cannot contradict or limit a clear regulation that has been applied with no objection or correction for almost three decades” and hence is not worthy of any deference.

The court steered a remarkable analysis of the plain text of the regulations specifically the wordings may hire, pay, fire, supervise, or otherwise control the work of [the] employee. In its analysis, the court noted that “[t]he use of “or” distinctly informs regulated employers that a single listed factor can establish the requisite “control” to demonstrate an employer-employee relationship. This formulation makes evident that there are multiple ways to demonstrate employer control, that is, by hiring or paying or firing or supervising or “otherwise” showing control. In context, “otherwise” anticipates additional, not fewer, examples of employer control.”

Judge Collyer further observed that through the 2018 memo, the USCIS attempted to substitute the unambiguous text of the regulations.

The court also analyzed if through the 2018 memo, that USCIS fundamentally conflated the requirement of employment in a specialty occupation with requiring evidence of non-speculative work assignments for the duration of the visa. To assess the legitimacy of requiring such evidence as a requirement of establishing a specialty occupation under the regulations, the court made a noteworthy distinction between “occupation” and “jobs”. It affirmed that Congress enacted a definition of occupation and an occupation consists of various levels requiring varied job duties. Hence, as long as the employment is in the specialty occupation, there is no requirement in the definition to prove that the daily assignments will be part of the specialty occupation.

The USCIS argued that the requirement is based on its interpretation of its own regulation, i.e the fourth prong of the specialty occupation definition  at 8 CFR  214.2(h)(4)(ii)(4) which justifies their new requirement to satisfy that the day to day assignments qualify as specialty occupation rather than satisfying that the occupation qualifies as a specialty occupation:

(4) The nature of the specific duties [is] so specialized and complex that knowledge required to perform the duties is usually associated with the attainment of a baccalaureate or higher degree.

Judge Collyer noted that first, all the four prongs are in alternative to each other, and secondly, the wording “nature of specific duties” in the fourth prong does not in any way change the requirement of a bachelor’s degree in other three prongs. Hence, the court noted that the fourth prong provides a situation where despite the foreign worker not having a bachelor’s degree, the position can qualify as a specialty occupation. It also noted that the USCIS cannot extend it as a policy to all H-1B visa holders requiring the description of the assignments for the whole duration and such interpretation of the fourth prong of the specialty occupation of its own regulation is “plainly erroneous”.

As to itineraries in case of placement at more than one location, 8 C.F.R. §214.2(h)(2)(i)(B) reads as follows:

Service or training in more than one location. A petition which requires services to be performed or training to be received in more than one location must include an itinerary with the dates and locations of the services or training and must be filed with the Service office which has jurisdiction over I-129H petitions in the area where the petitioner is located. The address which the petitioner specifies as its location on the I-129H petition shall be where the petitioner is located for purposes of this paragraph.

While interpreting the above-mentioned regulation, the itinerary memo of 1995 was issued which clearly stated that “the regulation does not require that the employer provide the Service with the exact dates and places of employment” and that the “[t]he itinerary does not have to be so specific as to list each and every day of the alien’s employment in the United States”.

The former Immigration and Naturalization Service  followed this interpretation of the regulation for more than two decades. Precipitously, in February 2018, the USCIS issued the above-mentioned new policy memorandum superseding the 1995 memo. Interestingly, the new February 2018 memo also interprets the same regulations quoted above and notes that “[t]here is no exemption from this regulatory requirement. An itinerary with the dates and locations of the services to be provided must be included in all petitions that require services to be performed in more than one location, such as multiple third-party worksites. The itinerary should detail when and where the beneficiary will be performing services”. (Emphasis added)

Plaintiffs in IT Serve Alliance v. Cissna raised the itinerary question and the court agreed with plaintiffs’ contention that the concern regarding non-availability of the work for the duration of the visa has already been addressed by the Congress through ACWIA 1998 which authorizes employers to place H-1B holders in the paid non-productive state. While referring to §212(n)(2)(C)(vii)(III), the Court concluded, “therefore, the itinerary requirement in the INS 1991 Regulation, as adopted by INS and now enforced by CIS pursuant to its 2018 Policy Memorandum, has been superseded by statute and may not be applied to H-1B visa applicants.”

As to the USCIS’s authority to issue approvals for less than three years, the court in ITServe Alliance v. Cissna  interpreted the plain text of the regulation to mean that the regulations (i) do not require USCIS to deny or grant the petition in its entirety; (ii) “up to three years” allows USCIS to approve petitions for a lesser duration. However, the court noted that USCIS has been following a practice to issue approvals for full three years and now if it will grant the approval for less period, it has to be supported with a “legitimate reason”.

More recently, a settlement was reached between the USCIS and plaintiffs of ITServe Alliance which invalidates the 2018 policy. Under this settlement, firstly, USCIS is required to rescind “in its entirety within 90 days” the 2018 Contract and Itinerary Memorandum. Secondly, USCIS agreed to “re-open and adjudicate” individual agency decisions on H-1B adjudications that were the subject of the ITServe Alliance lawsuit against USCIS (i.e., primarily the cases of its members). Thirdly, in deciding the cases again, “USCIS agrees that it will not apply the interpretation of the current regulatory language . . . defining ‘United States employer’ to require an analysis of employer-employee relationship under common law, and USCIS agrees to comply with Judge Collyer’s March 10, 2020, decision in ITServe Alliance, Inc. v. Cissna.” Fourthly, in adjudicating the cases again, “USCIS will not issue approvals for H-1B petitions with validity periods shorter than the time period requested by the H-1B petitioner, unless such decisions include or are accompanied by a brief explanation as to why the validity period has been limited and in compliance with Judge Collyer’s March 10, 2020, decision in ITServe Alliance, Inc. v. Cissna.”

Serenity Info Tech, Inc. v. USCIS

Serenity Info Tech, Inc. v USCIS is the most recent case, where the court specifically deployed Kisor analysis. The plaintiffs in this case are information technology consulting services companies. The USCIS denied the H-1B petition filed by Serenity Info Tech on two grounds:  (i) that the plaintiff failed to meet the definition of the “employer” under the regulations, and (ii) that the plaintiff failed to show specific and non-speculative qualifying assignments in a specialty occupation for the entire time requested on the petition. The issues in this case, similar to ITServe Alliance, hinged upon the USCIS’s interpretation of the term “employer-employee relationship” and the term “itinerary” as provided in the regulations and as applied by the USCIS.

The court analyzed the litany of policy memo issued by the USCIS since 1995 including the 2010 employer-employee memo up until the 2018 contracts and itinerary memorandum. The court noted that the 2010 memo listed numerous documents that could be used to demonstrate the employer-employee relationship. However, the memo also specifically clarified that while requesting additional evidence, the adjudicator should not request a specific type of evidence unless required by the regulations. As discussed earlier, the 2018 memo did not rescind the Employer-Employee memo but was intended to be read together with it.

The plaintiffs argued that the 2018 memo essentially departed from the 2010 employer-employee memo as it insists on a demonstration of not just “right to control” but “actual and exclusive control” over the day to day activities which is ultra vires the regulations. The suit also challenged the detailed itineraries requirement established under the 2018 memo.

While deciding if the 2018 memo is a legislative rule or mere interpretative rule, the court distinguished from Judge Collyer’s reasoning in ITServe v Cissna. Judge Collyer in ITServe ruled that the 2018 memo indeed is a legislative rule as “it attempted to impose legally binding obligations on regulated entities”. The Serenity court held that the 2018 memo is only an interpretive rule as it rescinded the 1995 memo which was an interpretive rule.

The court condensed the issue to a narrower ground of agency’s interpretation of “employer” and “itinerary” provided under the regulation and as applied by the USCIS in the cases before the court and if it warrants any deference under Auer.

The court applied Kisor to decide if the agency’s interpretation of the regulations deserves any deference and delved into an independent inquiry starting with if the regulations are ambiguous. Since the court in Serenity InfoTech held that the 2018 policy was an interpretive rather than a legislative rule, Kisor analysis was needed to determine whether the 2018 policy deserved deference or not.  The court discarded  USCIS’s argument that even though the term “employer” is defined in the regulations, the terms “employee”, “employed”, “employment” or “employer-employee relationship” are not defined. Rather, the court clarified that the absence of definition does not amount to ambiguity. The regulations provide “ample guidance” to determine if the employer-employee relationship exists.

The court pointed out that the fundamental flaw with the USCIS’s interpretation is that it obliterates all the other criteria mentioned in the regulations to establish an employer-employee relationship and focuses only on the “control” criteria. The court stated that USCIS’s focus on “control” elevates that one factor above other factors. Doing so goes against the rule of construction “ejusdem generis” which requires that the following words in a statutory formation should be defined by reference to the preceding words. Thus, the court noted that the interpretation that emphasizes one criterion to the derogation of others is in contradiction of plain language of the regulations and therefore is “not worthy of deference”.

The court further noted that even though the 2010 employer- employee memo incorporates common law, it specified that “all of the incidents of the relationship must be assessed and weighed with no one factor being decisive”. In fact, the 2010 employer- employee memo provides guidance to evaluate the factors enumerated using a totality-of-the-circumstances test while determining if the employer established the “right to control” over beneficiary’s employment. Therefore, the agency’s fixation with the “ability to control manner and means in which the work product of the beneficiary is accomplished” is just one factor even under the 2010 employer-employee memo.

The USCIS in Serenity Info Tech argued that the detailed itinerary requirement under the 2018 memo is more in alliance with the plain language of the regulation than the guidance under the 1995 memo which interpreted that the plain language of the regulation allows accepting a general statement regarding proposed employment. The court ruled that as the regulations unambiguously list what the itinerary must include, the agency’s itinerary interpretation also fails at the first step of Kisor analysis because there is nothing to interpret.

Further, the USCIS contended that the agency gets the regulatory basis to request a detailed itinerary from the fact that this information is imperative to demonstrate (i) non-speculative employment; and (ii) that the employees will be serving in a “specialty occupation”.

The court noted that by requesting day to day activities, the agency is conflating “non-speculative employment with non-speculative work assignments” and there is no such requirement in the statute or the regulations to request day to day assignments. And as to the USCIS’s reliance on the fourth prong as the regulatory basis to require detailed itinerary as evidence of specialty occupation, the court agreed in essence with Judge Collyer’s decision in ITServe Alliance specifically noting the distinction drawn between “occupation” and “job”.

It further noted that even though it is the “agency’s prerogative to ascertain generally whether the beneficiary will actually be serving in the purported specialty occupation but does not extend to micro-managing every aspect of the occupation’s duties.” The court also acknowledged the impracticability of expecting US employers to be able to “identify and prove daily assignments for the future three years for professionals in specialty occupation.”

In conclusion, the court decided that the regulations are clear and there is no basis in the statute or the regulations to submit day to day specific work requirements for the duration of the visa requested. Hence, the agency’s interpretation of the unambiguous regulations owed no deference.

We now analyze court cases that have relied on Kisor  to overturn “specialty occupation” denials.

Inspectionexpert Corporation v. USCIS

Inspectionxpert Corporation v. USCIS is a fine example of how Kisor has limited the scope of Auer deference. At issue was the interpretation of the provision 8 C.F.R §214.2(h)(4)(iii)(A) (referred to as “the Provision” in the decision). This provision states the four criteria under which an employer can establish that the occupation qualifies as a specialty occupation for H-1B purposes. The key question was whether the USCIS’s requirements of a degree in one singular subspecialty warranted deference. In this case, the petitioner challenged the denial of the H-1B petition based on the education requirements of the petition for the proffered position of a Quality Engineer. The requirements for the position were “a bachelor’s degree in Mechanical Engineering, Computer Science or a related technical or engineering field”. The USCIS denied the petition noting that:

the field of engineering is a broad category that covers numerous and various specialties, some of which are only related through the basic principles of science and mathematics, e.g nuclear engineering and aerospace engineering. Thus, a general degree in engineering or one of its other subspecialties, such as civil engineering or industrial engineering, is not closely related to mechanical engineering.

The issue at hand was USCIS’s reliance on the interpretation of the Provision to conclude that “a general degree in engineering or one of its subspecialties” as required by the position does not qualify as a specialty occupation under the Provision. The court relied on the Kisor test to decide if the USCIS interpretation requires deference. The petitioner argued that the plain language of the Provision suggests that reference to the bachelor’s degree implies a generic degree requirement. The court delved into the legislative history of the immigration statutes spanning over thirteen (13) pages before making an analysis on the issue and concluding why the USCIS’s interpretation does not warrant deference. The court disagreed with petitioner’s argument noting that it is in contravention of the “history and structure of the H-1B regulations” and affirmed that the “statutory and regulatory framework compels USCIS’s reading under which ‘the position at issue must require the attainment of a bachelor’s or higher degree in a specific specialty”.

However, the court still ruled in favor of the petitioner, and  specifically pointed to the 1990 Rule where the former INS specifically mentioned that:

The Service’s interpretation over the years has been that the common denominator for determining that an occupation is a profession is the requirement of at least a baccalaureate degree awarded for academic study in a specific discipline or narrow range of disciplines.

Citing to the above, the court noted that the historical administrative practice of the agency clearly shows that the interpretation followed by the USCIS in this decision does not reflect its “authoritative” or “official position”. The USCIS tried to backtrack its position on which the denial was based by emphasizing that the USCIS does not impose the one-degree rule. It only maintains that it cannot be a general degree. The court noted that concluding an engineering degree requirement as a generalized degree confirms the unreasonableness of the interpretation relied upon by the USCIS in the decision. The court noted that the INA defines professions (later substituted for specialty occupation) at a categorical level such as lawyers. It does not specify the specialty occupation as a “tax lawyer”. More importantly, it specifically includes “engineers”. The court also emphasized on the USCIS’s reasoning of not including “liberal arts degree” as its broadness whereas engineering was specifically noted and included as a profession/specialty occupation.

The court concluded that a denial on the basis that an engineering degree is a generalized requirement is tenacious and “contrary to the statute and the Agency’s past practices”.

Besides, there have been multiple other recent decisions that reflect a trend of successfully challenging USCIS’s denials of specialty occupation in broad violation of the statutory and regulatory text and also in contradiction of its own practice even if Kisor has not been specifically invoked. Below are two examples.

India House Inc. v. USCIS

In  India House v. USCIS, the court held that a General Operations Manager position requiring a bachelor’s degree in Hospitality Management or a directly related field qualifies as a specialty occupation. The court distinguished this case from Royal Siam Corp. v. Chertoff, 484 F.3d 139 (1st Cir. 2007) which established that a general-purpose degree such as a business administration degree is not a specific degree. The court noted that the requirement of a degree in Hospitality Management is a specific degree as the curriculum is dedicated specifically to food services and hospitality management which unlike a generic business administration degree cannot be used for any other institutional management The court also emphasized that even though the USCIS is not bound by its prior approvals, it is worth noting that it approved the petition twice in the past for the same position for the same petitioner and the beneficiary. Hence, as there is no change in the law or regulations and the USCIS has not accepted that the issuance of the prior H-1B visas was erroneous, there is no explanation as to how a position that was a specialty occupation in the past suddenly does not qualify to be so now and would constitute abuse of discretion.

Taylor Made Software Inc. v. USCIS

Taylor Made Software Inc v. USCIS  involved a position of Computer Systems Analyst where the USCIS denied the petition relying on OOH that many Computer Systems Analysts have a liberal arts degree and hence the occupation does not require a bachelor’s level training in a specific specialty. The court disagreed and noted that the regulatory criterion is not that a bachelor’s degree or its equivalent in a specific field is “always” required rather it states that bachelor’s degree or its equivalent is “normally” the minimum requirement for entry into the occupation. Therefore, the OOH language that “most” computer systems analysts have a bachelor’s degree in a specific field is the typical baseline.

In conclusion, the Supreme Court’s decision in Kisor has proved to be more potent than originally envisaged, where the courts are no longer paying traditional Auer deference and are instead reversing H-1B denials based on the USCIS’s erroneous interpretation of its own regulations. In addition to Kisor, the authors also acknowledge the brilliance and perseverance of ace litigators Jonathan Wasden and Bradley Banias who tenaciously fought many of these cases that brought down the house of cards that the government has stealthily built on shaky foundations with the sole purpose of obstructing meritorious and legitimate H-1B cases.

 *Guest author Sonal Sharma is a Senior Attorney at Jethmalani & Nallaseth PLLC in New York. Her practice involves both temporary nonimmigrant visa and permanent employment cases. She represents and advises clients – medium to large multinational corporate entities – from a wide variety of industries on intricate and comprehensive immigration matters.

 

 

Cyrus Mehta

The Differing Impact of Foreign Entity Changes on an L-1 Extension and EB-1(C) Petition

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By Cyrus D. Mehta and Rebekah Kim

U.S. Citizenship and Immigration Services (USCIS) has issued a final policy memorandum designating Matter of F-M- Co. as an Adopted Administrative Appeals Office Decision. The decision clarifies that for employment-based first preference category multinational executives or managers, a petitioner must have a qualifying relationship with the beneficiary’s foreign employer at the time the petition is filed, and maintain that relationship until the petition is adjudicated. It also clarifies that if a corporate restructuring affecting the foreign entity occurs before the immigrant visa petition is filed, a petitioner may establish that the beneficiary’s qualifying foreign employer continues to exist and do business through a valid successor entity.

This differs markedly for an L-1 extension. In our prior blog, Questions Arising From Foreign Entity Changes after an L-1 Petition is Approved, we explained that an extension request can be made for an L-1 even if the foreign entity (i.e., parent, affiliate, subsidiary) that employed the foreign national on the L-1 visa has dissolved and there is no successor in interest or successor entity, so long as there is a foreign qualifying entity, even if that foreign entity is not the one that employed the beneficiary. According to 8 CFR §214.2(l)(1)(ii)(G)(2), the employer must be doing business in the U.S. and at least one other country for the duration of the employee’s stay in the U.S. as an L-1 nonimmigrant. A foreign qualifying entity, also, must be doing business the entire time the beneficiary is in L-1 status. However, it is less clear whether the foreign qualifying entity needs to be the same one that employed the L-1 while s/he was abroad. Still, an old decision of the Board of Immigration Appeals, Matter of Chartier, 16 I&N Dec. 284 (BIA 1977), provides clarity. In Matter of Chartier, the L-1 employee was employed by a company in Canada, then transferred to work for the same employer in the U.S. The Service granted, then later revoked, the foreign national employee’s L-1 status because it found that the employer did not have a subsidiary or affiliate in Canada. The Service contended that without an established foreign branch, there was no place for the alien to return to, and his L-1 employment could not be deemed temporary. The Board rejected this argument, concluding in its Interim Decision that the L-1 employee could be sent back to Canada, or to the company’s affiliate in Belgium. The Board’s decision indicates that the L-1 remained valid so long as the company had a qualifying entity abroad, even if it was not the foreign entity where the L-1 employee gained his qualifying experience. This conclusion may also be drawn from USCIS L-1 training materials, which were uncovered in response to a FOIA request, and can be found on AILA InfoNet at AILA Doc. No. 13042663 (posted April 26, 2013).

Matter of F-M-Co confirms that the analysis changes if the L-1 beneficiary is sponsored by the U.S. entity for lawful permanent residency under the employment-based first preference for multinational executives or managers pursuant to INA § 203(b)(C) under the employment-based first preference (EB-1C), and the foreign entity where the beneficiary worked no longer exists as a result of a reorganization. There is no parallel regulatory provision to 8 CFR § 214.2(l)(1)(ii)(G)(2); the analogous provision at 8 C.F.R. § 204.5(j)(3)(i)(C) provides the “prospective employer in the United States is the same employer or a subsidiary or affiliate of the firm or corporation or other legal entity by which the alien was employed overseas.” (Emphasis added.) If the foreign entity that employed the beneficiary no longer exists, it must at least exist as a successor to the prior entity under the Neufeld Memorandum of 2009, which adopted a commonsensical definition of successor over a strict reading that had previously been followed – where a valid successor relationship could only be established through the assumption of all of a predecessor entity’s rights, duties and obligations. The Neufeld Memorandum turned to Black’s Law Dictionary for definitions of “successor” and “successor-in-interest”. The 2009 edition of Black’s Law Dictionary defined a “successor” as “a corporation that, through amalgamation, consolidation or other assumption of interests is vested with the rights and duties of an earlier corporation,” and a “successor-in-interest” as “one who follows another in the ownership or control of property” and “retains the same rights as the original owner, with no change in substance.” By ruling that the qualifying entity abroad is not required to exist in the exact same legal form, and that a successor entity may be considered to be the same entity that employed the beneficiary abroad, the AAO acknowledged the reality that large organizations may undergo reorganization, and as a result, associate entities may be merged, consolidated, or dissolved.

Nevertheless, the AAO’s adopted decision in Matter of F-M- Co will unfortunately lead to differing and absurd results for a nonimmigrant L-1 extension and for a petition for permanent residency. When a beneficiary applies for extension of L-1 status after the foreign entity that employed him/her ceases to exist, the extension may be approved based on the existence of another qualifying foreign entity abroad. However, when the beneficiary is then sponsored for permanent residency, there must be a valid current relationship between the U.S. Petitioner and the foreign entity or foreign successor entity, as broadly defined in the Neufeld Memorandum, in order for the immigrant visa to be approved. If, though a merger or transfer, the foreign entity no longer meets the definition of parent, affiliate, or subsidiary, and further does not meet the definition of a successor, the petition for permanent residency will not be approved.

Cyrus Mehta

FAQ Relating to Skilled Workers in the Green Card Backlogs during COVID-19

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Skilled workers caught in the employment-based backlogs face great uncertainty during the COVID-19 crisis. They have to continue to work for employers who have sponsored them green cards while maintaining H-1B status. As explained in my previous FAQ relating to changes in working conditions for H-1B workers, the DOL rules do not provide much flexibility to employers who may be forced to cut wages or furlough employees in order to preserve jobs. If an H-1B worker’s position is terminated, he or she has a 60 day grace period to leave the US or to change to another status.  This FAQ focuses on immigration issues facing foreign nationals who are waiting for their green cards while in H-1B status, although some may also be in L-1 status. They are mainly born in India, and as a result of the “per country limits” in the employment-based first, second and third preferences, they have faced disproportionate waiting times (going into decades) when compared to those born in other countries. But for their country of birth, they would have been green card holders, or even US citizens, by now, and would not be facing peril during COVID-19 with respect to their immigration prospects.

1. My employer can no longer afford to employ staff and terminated me yesterday. I am in H-1B status and am also the beneficiary of an I-140 petition in the employment-based second preference. I was born in India and have a January 1, 2013 priority date. While I am in the 60 day grace period, can I request an employment authorization document (EAD) under “compelling circumstances?”

An Obama era regulation entitled “Retention of EB-1, EB-2 and EB-3 Immigrant Workers and Program Improvements Affecting High Skilled Nonimmigrant Workers” was promulgated  to provide modest relief to high skilled workers born mainly in India and China who were caught in the crushing backlogs in the employment-based preferences.

One significant provision in this regulation provides an employment authorization document (EAD) to beneficiaries of I-140 petitions in the United States on E-3, H-1B, H-1B1, O-1 or L-1 nonimmigrant status if they can demonstrate compelling circumstances and whose priority dates are not current. While compelling circumstances have not been defined in the rule, DHS has suggested illustrative circumstances in the preamble, which includes serious illness and disabilities, employer dispute or retaliation, other substantial harm and significant disruptions to the employer.   Regarding what may constitute significant disruption, DHS has suggested loss of funding for grants that may invalidate a cap-exempt H-1B status or a corporate restructure that may no longer render an L-1 visa status valid.

It appears from the discussion in the preamble to the regulation that compelling circumstances have to be out of the ordinary. The fact that the process may be taking a long time does not constitute a compelling circumstance. The DHS also stated in the preamble that mere unemployment would not rise up to the level of compelling circumstances, but more will have to be shown such as that the unemployment was as a result of a serious illness or employer retaliation. However, under the “other substantial harm” discussion, a beneficiary who loses a job based on the closure of a business where the beneficiary has been applying a skill set in high technology for years (such as artificial intelligence) and will not be able to establish that the same industry exists in the home country would be able to demonstrate compelling circumstances.  Interestingly, compelling circumstances could also include circumstances relating to a business startup, and that the beneficiary of an approved I-140 petition through the national interest waiver would be able to demonstrate compelling circumstances. Similarly, physicians working in medically underserved areas may also be able to demonstrate compelling circumstances.

Notwithstanding the various examples of compelling circumstances provided in the preamble to the rule, the plain language at 8 CFR 204.5(p) (iii) simply states:

USCIS determines, as a matter of discretion, that the principal beneficiary demonstrates compelling circumstances that justify the issuance of employment authorization

Anecdotal evidence suggests that USCIS has been very niggardly in issuing EADs under compelling circumstances since the promulgation of the rule in the fading days of Obama’s presidency in January 2017. Unemployment in itself may not be a basis as stated in the preamble, but one can try to argue compelling circumstances in the COVID-19 period more forcefully. When making a case for compelling circumstances, it should be argued, that the plain language of the regulation takes precedence over the preamble or the government’s subjective interpretation of the term. Until there are formal administrative interpretations, the term “compelling circumstances” is like a blank canvass, which can be colored by any credible and reasonable argument by the applicant. Still, one cannot bank on the USCIS issuing an EAD under compelling circumstances as a result of unemployment even during the COVID-19 period. Something more in addition to unemployment should be shown in order to make a convincing argument for compelling circumstances.

2. How long will I be able to stay in the US if I am given a work authorization under “compelling circumstances”, and how can I still get a green card?

The EAD may be renewed on an annual basis if such compelling circumstances continue to be met, even if it is a different sort of compelling circumstance from the initial, or if the beneficiary’s priority date under the I-140 petition is within one year of the official cut-off date.

How will this work? The job offer supporting the I-140 petition must still be valid. In other words, there is no legal basis under the final rule to port to another job on a standalone I-140 petition. If the employer withdraws the job offer supporting the I-140 petition, the beneficiary could have another employer offer a position, and sponsor the beneficiary through a new labor certification and I-140 petition. The priority date from the old I-140 petition can be recaptured.

Unless the beneficiary is maintaining a valid nonimmigrant status (or can seek the exemption under either INA 245(i) or 245(k)), he or she will not be able adjust status in the United States and would need to process the immigrant visa at an overseas US consulate. The beneficiary’s stay under a compelling circumstances EAD will be considered lawful presence, and will not trigger the 3 or 10 year bars upon departure. Alternatively, the beneficiary can leave and return to the United States in a nonimmigrant status such as an H-1B, and then file for adjustment of status here. The rule, unfortunately, does not provide for routine travel through advance parole while on a compelling circumstances EAD.

3. Will my spouse and teenage child be able to also get a compelling circumstances EAD?

Yes. Derivative family members can also apply for the EAD concurrently with the principal beneficiary of the I-140 petition, but they will only be issued the EAD after the principal family member is first granted the EAD. They too must be in nonimmigrant status at the time of filing the initial application.

4. I have a pending I-485 application, although the final action date in the State Department Visa Bulletin is not current this month. My employer can no longer afford to employ me and is in the process of shutting down the business.

If the Form I-485 application has been pending for 180 days or more, you can exercise job portability under INA 204(j) by taking up a job or being offered a job in a same or similar occupation with another employer. The underlying labor certification and I-140 will still remain valid upon exercising portability under INA 204(j). The applicant will need to submit Form I-485, Supplement J.

Under 8 CFR 245.25(b), “[t]he term “same occupational classification” means an occupation that resembles in every relevant respect the occupation for which the underlying employment-based immigrant visa petition was approved. The term “similar occupational classification” means an occupation that shares essential qualities or has a marked resemblance or likeness with the occupation for which the underlying employment-based immigrant visa petition was approved.”

It is also possible for an adjustment applicant to “port” to self-employment if employment prospects are bleak during the COVID-19 era.

 5. My employer cannot afford to employ me during the COVID-19 period and has terminated my employment in H-1B status, but still wants to continue to sponsor me for the green card hoping that the economic situation will change for the better by the time my priority date becomes current. I have not yet filed for adjustment of status.

Since the employment-based green card sponsorship is based on a prospective position, your employer can still continue with the I-140. If you leave for India within the 60 day grace period after cessation of employment and have not options to remain in H-1B status through another employer or change status, you can ultimately process the immigrant visa at a US consulate overseas upon your priority date becoming current. Given the current wait times in the employment-based first, second and third preferences for India, it may take many years, even decades, before you can get back to the US as a permanent resident. However, your employer will still be able to file an H-1B petition on your behalf in the future to bring you back before you obtain the green card. This H-1B petition will not be counted against the H-1B cap as you have been previously counted against the cap, and you will be entitled to three year extensions beyond the 6 year H-1B limitation.

6. Since there are no flights to India at this time, how can I depart the US within the 60 day grace period?

You could try requesting a change of status to B-2 visitor status before the end of the 60 day grace period by filing Form I-539, and asking for an additional six months in that status. Although you are the beneficiary of the an I-140 immigrant visa petition, which must be disclosed on Form I-539, the fact that you intend to ultimately apply for permanent residence should not conflict with your request for a change of status to B-2 if you can demonstrate your genuine inability to depart the US and that it will take a long time before you even become eligible for a green card. Furthermore, you can also argue that your intention is to apply for an immigrant visa at the US Consulate before you can come to the US as a permanent resident.

 7. I am in my sixth year of H-1B status with an approved I-140 petition. If the employer who filed the I-140 petition no longer wishes to employ me now or in the future, how can I still take advantage of this I-140 petition and get a green card through another employer?

If another employer files a new labor certification and I-140 petition on your behalf, the priority date of the original I-140 petition can still be retained even if the former employer withdraws the petition. Since you have already been counted under a prior H-1B cap, the new employer can file another H-1B petition so that you can reenter the US in H-1B status. You will be eligible for 3 year extensions beyond the six year limitation of the H-1B visa until your priority date becomes current.

8. Will President Trump’s latest green card ban impact me or my family?

President Trump’s Proclamation will ban people seeking immigrant visas at a US Consulate for 60 days from April 23, 2020. Therefore, it will not impact those who are already in the US and seeking permanent residence through adjustment of status. Even if you depart the US to process for an immigrant visa at a US Consulate, the ban will not apply to one who was in the US on the effective date of the Proclamation, which was April 23, 2020. The Proclamation will nevertheless ban derivative family members who are processing for immigrant visas at a US consulate even if the principal applicant adjusted status in the US unless they were in the US on April 23, 2020.

 

Cyrus Mehta

FAQ on Changes in Salary and Other Working Conditions for Nonimmigrant Workers in L-1, O, TN, E and F-1 Status Due to COVID-19

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In continuation of my Frequently Asked Questions (FAQ) relating to the COVID-19 crisis on immigration issues, I focus on other nonimmigrant visa categories besides the H-1B visa category. Changes in employment at the workplace, especially salary reductions, continue to abound especially for other nonimmigrant visa workers in L, E, O and TN status. There are also questions relating to students in F-1 status who are under Optional Practical Training.  Although a prior FAQ covered changes in salary and working conditions for H-1B workers, where the Department of Labor imposes rigid and inflexible rules, there may be more flexibility for other nonimmigrant visa categories that are not subject to DOL rules and the Labor Condition Application. Since there are plenty of grey areas with no definitive answers, my interpretations of these rules are based on my experience in advising employers and H-1B workers during past disasters and presently during the COVID-19 crisis.

1. Can the salary of an L-1 nonimmigrant worker be reduced as a result of the adverse economic impact caused by the COVID-19 crisis?

Since the L-1 visa is not governed by the same DOL rules as the H-1B visa category, it may be permissible to reduce the compensation of a nonimmigrant worker on an L-1A or L-1B visa. So long as the nonimmigrant is working in the appropriate L-1 capacity as either an executive or manager or in a specialized knowledge capacity, a reduction in salary ought not to be considered as a violation on the part of the employer or status violation for the nonimmigrant worker. There is a long line of administrative decisions holding that the employment of an L-1 worker is not necessarily determinative upon the amount or existence of a salary. A non-salaried chairman has been able to qualify for an L-1, see Matter of Tessel, Inc., 17 I&N Dec. 631 (AAC 1981), and the salary may even emanate from the foreign entity, see Matter of Pozzoli, 14 I&N Dec. 569. While there is a legal basis for an L-1 worker’s salary to be reduced, this does not mean that the government cannot later question whether the lower salary is commensurate to the executive, managerial or specialized position under the L-1 visa. One should also note a recent decision, see Matter of I Corp, Adopted Decision 2017-02 (AAO April 12, 2017), which held that USCIS cannot approve an L-1 petition where the proffered wage violated the minimum wage under the Fair Labor Standards Act.

Changing the terms of an L-1 worker’s employment in the US from full time to part-time may also not require an amendment as it may not constitute a material change so long as the worker is still employed in the qualifying L-1 capacity.

2. Can one re-file under the L-1 “new office” rule if the business has been impacted due to COVID-19?

The USCIS rules governing the L-1 visa category detail special provisions where a new parent, subsidiary, branch or affiliate office is opened in the US within 1 year, and this new office petitions for an L-1 visa for a manager, executive or specialized knowledge worker. The petition may be approved even if there is no proof of extensive business activity. A new office is an organization which has been doing business in the US through a parent, subsidiary or branch for less than 1 year. If the business is shuttered due to a stay at home order, it may be possible to argue that it has not been doing business for 1 year, and should still be possible to obtain another extension as a new office. In the past, the USCIS has not been receptive to such arguments if the business has been in existence for 1 year, but could not function due to economic downturns. However, it would not hurt to apply as a “new office” for another year, in the alternative, when also applying for a regular 2 year extension given the most unusual economic impact COVID-19 has caused, and the fact that the business was forced to stay shut as a result of government orders and not due to the volition of the employer.

3. Is there similar salary flexibility for a nonimmigrant on an O-1, E-1, E-2 or TN visa?

I would say “Yes” since these nonimmigrant categories are also not subject to the LCA and other DOL rules. With respect to the O-1 visa, if one of the basis to establish extraordinary was to demonstrate a high salary in relation to others, then a reduction in the O-1 worker’s salary may undermine the worker’s ability to maintain status. On the other hand, if there has been an across the board reduction for all persons in that category, then the salary reduction could still be potentially justified as being in comparison to others who have demonstrated extraordinary ability in the field.

With regards to an E-2 investor, it is important for the investor to demonstrate that the enterprise is not marginal. An enterprise is marginal if it does not have present or future capacity to generate more than a minimal living for the investor and the family. Therefore, it would be important to demonstrate that a drop in revenues from the business that would otherwise sustain the investor was temporary due to COVID-19.

4. Can nonimmigrant workers in L, O and TN status perform their duties without pay and not be in danger of violating their status?

One could argue that so long as the nonimmigrant worker is performing the duties for the employer under the terms of the nonimmigrant visa category, it would not be a violation of their status even if the employer cases to pay them. The government will likely disagree, but it may be possible to counter argue that ICE has indirectly allowed F-1 students who are engaged in Optional Practical Training to serve in a voluntary capacity in work that is related to their studies so long as it is 20 or more hours (although the 20 hour minimum requirement has been relaxed during COVID-19). For instance, an F-1 who graduated with a law degree could conceivably still be legitimately maintaining status under F-1 OPT by providing pro bono representation to indigent clients. Note that ICE does not permit voluntary employment under STEM OPT. Still, employers have to be careful that they do not violate federal and state laws regarding paying the minimum wage. This sort of voluntary situation would more readily apply to an O-1 who is traditionally self-employed or an E-2 investor in a startup that has yet  to generate revenues.

5. Would nonimmigrant visa holders in E-3 and H-1B1 status have the same flexibility?

No. Since the E-3 (for Australians) and the H-1B1 (for  Singaporeans and Chileans) visa categories are subject to the LCA like the H-1B visa category, please refer to my prior FAQ relating to changes in salary and working conditions for H-1B workers.

6. Can an F-1 engage in Curricular Practical Training while overseas?

Yes. According to the latest COVID-19 Guidance for SEVP Stakeholders dated April 30, 2020, students may engage in CPT during their time abroad, provided they are:

  • Enrolled in a program of study in which CPT is integral to the program of study;
  • Their DSO authorized CPT in advance of the CPT start date; and
  • Either the employer has an office outside the United States or the employer can assess student engagement and attainment of learning objectives electronically. According to earlier March 13, 2020, COVID-19: Guidance for SEVP Stakeholders, this enrollment may be online. All other requirements at 8 CFR 214.2(f)(10)(i) still apply.

7. Can an F-1 engage in Optional Practical Training while overseas?

Although an F-1 can engage in OPT while working in the US for an employer remotely, it has not been determined by DHS whether a student can engage in OPT while overseas during the COVID-19 period. Since USCIS also adjudicates applications for employment authorization, this is not just an SEVP issue.  Since an F-1 OPT cannot be unemployed for more than 90 days, and a STEM OPT cannot be unemployed for more than 150 days, an F-1 should be prepared  to argue that working overseas for a US employer while overseas during the COVID-19 crisis did not constitute  unemployment during OPT or STEM OPT.

Fortunately, in 2010, SEVP provided the following guidance, which is likely applicable even during COVID-19:

“Time spent outside the United States during an approved period of post completion OPT counts as unemployment against the 90/120-day limits, unless the student is either:

  • Employed during a period of leave authorized by an employer; or
  • Traveling as part of his or her employment.”

While this 2010 does not directly relate to a student working remotely for an employer while overseas during the COVID-19 period, as the student is neither on authorized leave nor travelling as part of the employment, it is closely analogous and hopefully SEVP and USCIS should approve of remote OPT employment while overseas as not counting towards unemployment.